AI Generated Image
AI leader Alphabet's expenditures surge, making investors nervous
Detroit Free Press • • business
Key Points:
- Alphabet experienced a 7.1% stock selloff, its worst since May 2025, wiping nearly $300 billion from its market value due to soaring AI-related capital expenditures and lowered free cash flow.
- Tesla's shares plunged 20% for the week after missing earnings expectations and reporting a sharp rise in capital expenditures tied to AI, robotics, and autonomous driving, resulting in negative free cash flow.
- Geopolitical tensions escalated following Iran-backed attacks on Saudi oil tankers and President Trump’s threats against Iran, pushing Brent crude above $100 per barrel and driving up the two-year Treasury yield to its highest level since February 2025.
- Defense stocks like Lockheed Martin and RTX Corp. surged due to record backlogs and strong demand for missile defense systems, reflecting expectations of increased U.S. defense spending.
- General Motors stock rose about 10% after delivering its 16th consecutive earnings beat and issuing improved full-year guidance, contrasting with the struggles of major AI investors.
